Uniqa Insurance Group Ag · VIE:UQA
Uniqa Insurance — 9M 2019 Earnings Presentation
64 slides from Uniqa Insurance's earnings presentation, November 2019
Slide 1: UNIQA Insurance Group AG Investor Presentation 9M19 Results
UNIQA Insurance Group AG Investor Presentation 9M19 Results
Slide 2: Agenda
1. Highlights 2. Economic Capital and Embedded Value 3. Strategic initiatives 4. 9M19 results 5. Appendix UNIQA Investor Relations 2
Slide 3: Key Financial Indicators
Key Financial Indicators Earnings per share (EUR) Regulatory Solvency Capital Position (%) 0.79 250% 248% 194% 202% 203% 0.54 0.54 0.48 0.37 9M15 9M16 9M17 9M18 9M19 FY15 FY16 FY17 2018 9M19 Operating Return on Equity (%) Book value per share (EUR) 17.2% 11.07 10.34 10.29 10.20 10.0% 10.2% 10.5% 10.
Slide 4: UNIQA at a glance
UNIQA at a glance Key financials EURm UNIQA’s geographical footprint 2013 2014 2015 2016(c) 2017 2018 Gross written premiums(a) 5,886 6,064 6,325 5,048 5,293 5,309 Premiums earned 5,641 5,839 6,102 4,443 4,628 4,761 (retained)(a) Earnings before taxes 308 378 423 225 265 295 Consolidated net profit(
Slide 5: UNIQA's history
UNIQA‘s history UNIQA Investor Relations 5
Slide 6: UNIQA is very well positioned
UNIQA is very well positioned Strategic Market leading Growth Dividend Clearly defined bancassurance position in potential in capacity strategy partnership Austria CEE with Raiffeisen € UNIQA Investor Relations 6
Slide 7: Market leading position in Austria
Market leading position in Austria Market shares in Austria(a) Austria GWP(b) by distribution channel Bank P&C 17.9% 2 20% Direct and others 5% Own employees 50% and exclusive agencies Health 45.5% 1 25% Brokers and multi agencies Life 18.3% 2 Own sales force ~1.600 Overall 21.6% 2 Exclusive agents
Slide 8: Strategic partnership with Raiffeisen banking group in AT & CEE
Strategic partnership with Raiffeisen banking group in AT & CEE Business model based on products tailored to banking requirements, excellent process quality and high level sales support including sustainable incentive schemes, sales support/training and POS-tools Austria ▪ Distribution via local Rai
Slide 9: Secular and profitable growth opportunity in CEE
Secular and profitable growth opportunity in CEE Broad CEE platform with 15 core markets Insurance density 6.027 2.440 Central Europe (CE) Eastern Europe (EE) South Eastern Europe (SEE) Clients: 3.2m Clients: 0.8m Clients: 2.1m 2.148 GWP: EUR 934m GWP: EUR 177m GWP: EUR 307m Share of GWP: 61.6% Shar
Slide 10: Free surplus generation covering progressive dividend policy
Free surplus generation covering progressive dividend policy Life and health free surplus generation Surplus in €M 400 ▪ Less capital intensive new business in life (reduction of 300 guarantees) 244 200 53 171 179 ▪ Reduction in one-off 161 139 commission payments 43 90 46 71 100 48 191 ▪ In-force m
Slide 11: Strategy
Strategy UNIQA Investor Relations 11
Slide 12: UNIQA will be able to ensure attractive financial results
UNIQA will be able to ensure attractive financial results Key initiatives 2016–2020 Operating KPIs Targeted financial results GWP 2% p.a. 13.5% <24% operating ROE1 NCR2 average in 2017–2020 in 2020 COR <95% “Each year in 2020 increasing DPS” ECR >170% in 2016–2020 from 2016 Net cost reduction and Co
Slide 13: Significant investments to advance UNIQA's business model
Significant investments to advance UNIQA’s business model started in 2016 Investments assigned to initiatives 2016–2020 2021–2025 Investments 2016-2020 Total Thereof Total Thereof Σ € 330M Investment Expensed Investment Expensed Operational € 70M € 60M - - 21% Excellence Digitisation € 75M € 65M - -
Slide 14: Agenda
1. Highlights 2. Economic Capital and Embedded Value 3. Strategic initiatives 4. 9M19 results 5. Appendix UNIQA Investor Relations 14
Slide 15: Group Capital Requirements
Group Capital Requirements Regulatory SII Capital Ratio SCR-ratio EUR mn Split by Risk Module Split by Segment Split by Region1 216% 203% Health SLT / CAT Life SEM EEM Non-Life underwriting CEE 4% Market risk AT 5,129 4,723 13% WEM 6% 5% 31% 4% 6% Life underwriting 40% 19% 2,373 2,332 61% Non-Life 4
Slide 16: Group SCR Results
Group SCR Results Details on Solvency Capital Ratio +103% SCR development by Risk Module SCR, decrease by 41 MEUR In EUR mn 4.723 ▪ Decrease of market risk Tier 3 ▪ Lower interest rate risk: Due to 0,1% Tier 2 negative interest rates there is a risk 126 451 128 19,7% for EUR cash flows only from the
Slide 17: Group Economic Capital
Group Economic Capital Sensitivities Impact of sensitivities on ECR-ratio Change in ECR-ratio ∆ to base value Base Value 205% Interest rates +50 bps 220% +16%-p Interest rates -50 bps 193% -12%-p Equity -30% 200% -5%-p FX +10% 208% +4%-p FX -10% 201% -4%-p Credit spread +100bps 175% -30%-p Earth qua
Slide 18: UNIQA follows a clear steering approach
UNIQA follows a clear steering approach Solvency steering rules Consider returning capital Opportunity to shareholders ▪ Solid capital base as 190% Max. prerequisite in current market – ECR target set 170% Target at 170% ▪ Clearly defined risk 155% ambition and shareholder Consider/apply measures Ca
Slide 19: Market Consistent Embedded Value: New Business Value
Market Consistent Embedded Value New Business Value New Business Value New Business Margin Present Value of NB Premiums In EUR mn As a % of PVNBP In EUR mn Recurring Premium Single Premium 2017 * 99 +4.5% 2017 * 1,967 232 2,199 2018 103 +5.9% 2018 1,672 76 1,748 NBV NBM ** Restated Split by region P
Slide 20: Market Consistent Embedded Value
Market Consistent Embedded Value Analysis of Change: In-Force Business 16 Restatement and opening adjustments include: 47 Rollforward 103 2 3,363 ▪ Capital and dividend flows 3,348 -13 (EUR -83mn) ▪ Foreign exchange variance (EUR -9mn) 31 Assumptions Increase in Life & Health MCEV driven by and Vari
Slide 21: Agenda
1. Highlights 2. Economic Capital and Embedded Value 3. Strategic initiatives 4. 9M19 results 5. Appendix UNIQA Investor Relations 21
Slide 22: Strategic initiatives
Strategic initiatives UNIQA Investor Relations 22
Slide 23: Success reflected in reduced loss ratio
Success reflected in reduced loss ratio Targets 2020 9M19 P&C 2016–2020 6-7% “Further increase P&C profitability 4% 2.6% GWP growth and ensure differentiated growth” p.a. GWP in CEE growth in 2016– 0.7% 2020 ~2% Portfolio Claims Anti management management fraud GWP growth in Austria <95% 95.9% 3.5%
Slide 24: New traditional product reduces capital intensity
New traditional product reduces capital intensity Our new traditional product Product details ▪ Modular product incl. biometric options ▪ Higher flexibility for customers (e.g. surrender values) Customer ▪ Clear and transparent in the interest of Benefit consumer protection ▪ Based on a traditional
Slide 25: Guarantees in portfolio will decrease significantly
Guarantees in portfolio will decrease significantly Austria: Actuarial reserve fund by guarantees Development until 2020 Reserve fund in €BN Av. guarantee in % ▪ Reduction of actuarial reserve funds to € 8.6BN Average guarantee 12 2.4 mainly due to ‒ Stop of prolongations ‒ Product strategy shift 8
Slide 26: Successful new business will be visible in NBV
Successful new business will be visible in NBV Targets 2020 9M19 Life 2016–2020 “Reduce capital requirements € 2.6BN2 €1BN and increase profitability” GWP Management Inforce New € 30M–35M p.a. rules business business new business value 50–70 bps 50bps margin on reserves1 24.5% 16%2 NCR UNIQA Investo
Slide 27: Profitable growth demonstrated over the last decade
Profitable growth demonstrated over the last decade Profitable growth (Group figures) GWP in €M Long-term profitability CAGR +2.6% 2 supported by Austrian 1 1,086 878 909 938 961 964 1,004 1,042 market specifics: 1,000 717 742 765 781 799 832 820 846 ▪ Ability to adjust 2004 2006 2008 2010 2012 2014
Slide 28: Sustainable earnings and cash flow contribution expected to continue
Sustainable earnings and cash flow contribution expected to continue Targets 2020 9M19 Health 2016–2020 ▪ “Remain market leader in profitable 4.6% health business” 2.5–3% p.a. GWP growth 2016–2020 ▪ “Sustainable cash flow generation” Brand Sales € 25M–30M new business value 254bps 350–450 bps Value
Slide 29: TOM (UAT): Improve efficiency relentlessly
TOM (UAT): Improve efficiency relentlessly Schematic TOM target picture Products Processes IT System ▪ Standardization of products and Group processes ▪ Centralization of back office As-Is Products Processes IT System functions: Planned reduction in AT OE1 from 2,800 to 2,500 until 2020 Products Pro
Slide 30: Core IT: Modernization of core and cross systems
Core IT: Modernization of core and cross systems Functional scope of UIP • All Core Systems are in scope • All relevant cross systems in scope (Partner Management, Commission, Collection and Disbursement) UNIQA Investor Relations 30
Slide 31: UNIQA strives to become one of the leading digital insurers
UNIQA strives to become one of the leading digital insurers in Austria and CEE Our digital path1 Digital Digital Customer Insurer ▪ Foster UNIQA’s innovation culture ▪ Sequentially build up capabilities to increase Sales Digitise customer digitise experience ‒ Customer experience ‒ Operations ! ▪ En
Slide 32: UNIQA Ventures as Competence Center and R&D unit
UNIQA Ventures as Competence Center and R&D unit for the indexing of new business models Why? What? How? does UNIQA Ventures exist is UNIQA Ventures doing is UNIQA Ventures doing it 1. To identify and understand 1. Searching for exceptional 1. Connecting UNIQA with all trends and innovative entrepre
Slide 33: UNIQA Ventures creates strategic added value for the Group
UNIQA Ventures creates strategic added value for the Group beyond the financial return * Highlights UNIQA Ventures ▪ 20 Investments Helsinki Tallinn * ▪ Focus Areas: InsurTech, FinTech und * * HealthTech ▪ ~18 Mio. € invested Berlin London Brussels Prague ▪ >20% capital gain * Paris * Vienna ▪ >1/3
Slide 34: Agenda
1. Highlights 2. Economic Capital and Embedded Value 3. Strategic initiatives 4. 9M19 results 5. Appendix UNIQA Investor Relations 34
Slide 35: Snapshot 9M19
Snapshot 9M19 EURm 9M18 9M19 % Reduction in Life business; Gross premiums written(a) 4.042.3 4.095.7 1.3% Continued growth in P&C and Premiums earned (retained) 3.571.4 3.642.3 2.0% Health Net investment income 443.7 433.4 -2.3% Tailwinds from capital markets; Insurance benefits 2.763.9 2.783.2 0.7
Slide 36: Continued growth in P&C and Health; ongoing reduction in Life
Continued growth in P&C and Health business; Ongoing reduction in Life business Gross written premium(a) per business line EURm 0.3% 3.0% 1.3% 5.211 5.293 5.309 1.530 5.048 4.042 4.096 254 113 25 441 85 80 169 1.267 335 1.285 1.281 1.336 1.244 959 1.358 25 28 30 25 994 1.367 1.357 342 322 302 311 28
Slide 37: Cost Ratio increased to 26.3%
Cost Ratio increased to 26.3% driven by higher CAPEX and DAC amortization in Life business Cost ratio (net) (%), Costs (EURm) 3.0% 4.1% 1.286 1.315 363 1.276 347 350 1.190 7.0% 322 309 1.019 417 420 463 952 346 139 120 127 108 103 356 324 212 228 210 220 62 52 58 47 47 26.6% 25.9% 28.3% 157 25.0% 26
Slide 38: P&C: COR improved to 95.9%
P&C: COR improved to 95.9% Combined ratio (net) (%) -2.8 pp 97.9% 98.1% 97.2% 98.3% 97.5% 96.8% 95.8% 96.3% -0.8 pp 93.0% 96.6% 95.9% 30.4% 32.4% 31.6% 31.4% 30.2% 33.5% 31.6% 33.0% 29.4% 30.7% 31.3% 67.5% 65.7% 65.9% 65.4% 65.6% 63.7% 64.7% 65.4% 63.6% 66.0% 64.5% 2015 2016 2017 2018 3Q18 4Q18 1Q19
Slide 39: P&C: Premiums earned increased
P&C: Premiums earned increased due to balanced growth in AT and CEE Net premiums earned EURm Investment result EURm Earnings before taxes EURm 3.8% -54.0% 40.8% 44 683 34 36 31 666 32 13 29 658 658 17 645 10 1 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 ▪ On net earned
Slide 40: Health: Long term growth continued
Health: Long term growth continued Cost – benefit ratio (%) Investment result EURm Earnings before taxes EURm 2.5% 104% -35.9% 103% 103% 51 99% 97% 42 41 19% 16% 16% 14% 20% 29 19 30 29 28 85% 84% 88% 88% 77% 8 2 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Benefit Rati
Slide 41: Life: Earnings contribution holding up
Life: Earnings contribution holding up despite low interest rate environment in 9M19 Reserve (net) EURbn Investment result EURm Earnings before taxes EURm -7.9% 16.000 16.016 113 15.762 265.5 15.498 15.483 % 99 98 42 91 35 51 54 50 16 61 32 16 4 6 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q
Slide 42: Investment Activity
Investment Activity Investment income EUR 281 ▪ Net investment result of EUR 433m in 9M19 (EUR 209 218 444m in 9M18) 191 190182 200 179 167170 158160 142 145 143145158134 135 132 ▪ Current income of EUR 386m in 9M19 (EUR 394m in 108 101 9M18) 76 ▪ Contribution from participation in STRABAG: EUR 29m
Slide 43: Outlook FY19
Outlook FY19 ▪ UNIQA expects slightly growing GWP in FY19: ▪ P&C growth of roughly 2% driven by Austria and CEE ▪ Health growth on long term trend of approximately 3% ▪ Life: GWP decrease to continue mainly due to muted demand in Austria ▪ Combined Ratio will improve compared to FY18 (96.8%) ▪ Net i
Slide 44: Agenda
1. Highlights 2. Economic Capital and Embedded Value 3. Strategic initiatives 4. 9M19 results 5. Appendix UNIQA Investor Relations 44
Slide 45: UNIQA Austria
UNIQA Austria EURm 9M18 9M19 Δ yoy Gross premiums written(a) 2.853.4 2.905.9 1.8% Reinsurers' share -550.0 -574.8 4.5% Change due to premiums earned -48.3 -47.8 -1.1% Net Premiums Earned(a) 2.255.1 2.283.4 1.3% Savings portion included in premiums -153.6 -153.6 0.0% Premiums Earned 2.101.5 2.129.8 1
Slide 46: UNIQA Austria Segments
UNIQA Austria Segments P&C Health Life EURm 9M18 9M19 Δ yoy 9M18 9M19 Δ yoy 9M18 9M19 Δ yoy Gross premiums written(a) 1.330.3 1.376.7 3.5% 758.2 795.8 5.0% 764.9 733.4 -4.1% Reinsurers' share -518.1 -549.9 6.1% -0.2 -4.4 2047.4% -31.8 -20.5 -35.5% Change due to premiums earned -45.9 -42.7 -7.0% -2.1
Slide 47: UNIQA International
UNIQA International EURm 9M18 9M19 Δ yoy Gross premiums written 1.174.8 1.175.7 0.1% Reinsurers' share -372.3 -345.4 -7.2% Change due to premiums earned -21.8 -27.2 24.8% Net Premiums Earned 780.7 803.1 2.9% Savings portion included in premiums -72.5 -71.4 -1.5% Premiums Earned 708.2 731.7 3.3% Net
Slide 48: UNIQA International Segments
UNIQA International Segments P&C Health Life EURm 9M18 9M19 Δ yoy 9M18 9M19 Δ yoy 9M18 9M19 Δ yoy Gross premiums written 806.3 811.7 0.7% 59.6 59.7 0.1% 308.9 304.3 -1.5% Reinsurers' share -357.1 -337.5 -5.5% -7.7 -1.9 -74.9% -7.4 -6.0 -19.0% Change due to premiums earned -18.7 -18.5 -1.2% -3.0 -8.9
Slide 49: UNIQA International – country deep dive
UNIQA International – country deep dive in EURm GWP(a) Non-life GWP(a) Health GWP(a) Life GWP(a) Total 9M19 % to PY 9M19 % to PY 9M19 % to PY 9M19 % to PY FX adjusted (b) Western Europe (WE) 7.1 -73% 0.0 -100% 0.0 7.1 -83% -83% Western Europe (WE) 7.1 -73% 0.0 -100% 0.0 7.1 -83% -83% Czech Republic
Slide 50: UNIQA International – country deep dive
UNIQA International – country deep dive in EURm Premiums earned (a) Net investment income Combined ratio P&C Cost ratio Earnings before taxes 9M19 9M18 9M19 9M18 9M19 9M18 9M19 9M18 9M19 9M18 (b) Western Europe (WE) 0.8 12.4 0.0 0.3 305.1% 113.3% 219.5% 16.8% -1.5 -0.2 Western Europe (WE) 0.8 12.4 0
Slide 51: Group Balance Sheet
Group Balance Sheet Liabilities Assets EURm Sep 19 Dec 18 EURm Sep 19 Dec 18 A. Total equity 3.415.3 2.986.6 14.4% A. Tangible assets 372.2 311.1 19.6% B. Land and buildings held as financial I. Shareholder equity 3.398.4 2.972.1 14.3% investments 1.103.8 1.104.1 0.0% C. Intangible assets 1.652.3 1.
Slide 52: Shareholders' equity (excluding minority interest)
Shareholders‘ equity (excluding minority interest) EURm 75 3.398 163 167 497 2.972 Valuation of financial Dividend Profit attributable Other Sep 19 Dec 18 instruments AFS to shareholders Shareholders’ equity increased in 9M19: ▪ Increase of revaluation reserves due to positive market movements in 9M
Slide 53: Group Income Statement
Group Income Statement EURm 3Q18 4Q18 1Q19 2Q19 3Q19 9M18 9M19 Δ yoy Gross premiums written(a) 1.243.9 1.267.2 1.530.0 1.285.0 1.280.8 4.042.3 4.095.7 1.3% Reinsurers' share -40.7 -45.7 -58.5 -38.9 -33.4 -145.9 -130.8 -10.3% Change due to premiums earned 54.2 62.7 -176.7 37.3 41.7 -98.9 -97.6 -1.4%
Slide 54: Group Operating Segments
Group Operating Segments P&C Health Life EURm 9M18 9M19 Δ yoy 9M18 9M19 Δ yoy 9M18 9M19 Δ yoy Gross premiums written(a) 2.145.7 2.201.5 2.6% 817.8 855.5 4.6% 1.078.9 1.038.8 -3.7% Reinsurers' share -113.3 -110.3 -2.7% -1.9 -2.1 8.5% -30.7 -18.5 -39.7% Change due to premiums earned -93.5 -83.9 -10.3%
Slide 55: Other Segments
Other Segments Consolidation Reinsurance Group Functions EURm 9M18 9M19 Δ yoy 9M18 9M19 Δ yoy 9M18 9M19 Δ yoy Gross premiums written -846.8 -859.7 1.5% 860.9 873.8 1.5% 0.0 0.0 N/A Reinsurers' share 849.8 860.5 1.3% -73.3 -71.2 -2.9% 0.0 0.0 N/A Change due to premiums earned 3.0 3.3 10.1% -31.8 -25.
Slide 56: Fixed income portfolio
Fixed income portfolio Overall composition Rating distribution Dec18 EUR 16.2bn Governent Bonds EU 8% 2% 24% 24% 25% 25% 25% 23% Covered Bonds 19% 14% 16% 45% Corporates 6% 7% 4% 4% 14% Government Bonds Non-EU Financials AAA AA A BBB <BBB Not rated 17% Sep 19 Dec 18 Other By segment Sep 19 EUR 17.1b
Slide 57: Fixed income portfolio: Government and government related
Fixed income portfolio Government and government related Overall composition EUR 9.8bn Rating distribution 2% Rest of Europe 4% 4% Austria 30.7% 3% Rest of World 6% 35% Poland 7% Belgium 26.3% France 7% Europa Slovakia 7% 12% Ireland 19.2% 12% Supranational Organisations 18.2% By segment Italy 20% 5
Slide 58: Fixed income portfolio: Corporates including financials
Fixed income portfolio Corporates including financials Overall composition EUR 4.0bn Rating distribution 4% 2% United States of America 1% 5% Rest of Europe 21% 38.6% 7% Austria France 33.4% Germany 16% 16% United Kingdom Rest of World Europa 14% 14% Netherlands By segment Italy 13.8% 20% 9.0% 32% 4
Slide 59: Fixed income portfolio: Corporate thereof financials
Fixed income portfolio Corporate thereof financials Overall composition EUR 1.4bn Rating distribution 6% United States of America 46.3% 2% 4% Austria 5% 31% Germany 10% Rest of World France 4% Netherlands United Kingdom 16% 21% Switzerland Rest of Europe By segment 19.4% 12.4% 11.4% 24% 7.1% 45% P&C
Slide 60: Fixed income portfolio: Covered bonds
Fixed income portfolio Covered bonds Overall composition EUR 2.8bn Rating distribution 1% Rest of Eurpoe 3%4% 21% Austria 7% France 66.7% 3% Germany 6% United Kingdom Australia 16% 9% Netherlands Spain 11% Rest of World 19% Belgium By segment Norway 25.7% 15% 15% P&C 4.0% 2.9% Health 0.0% 0.7% 70% L
Slide 61: UNIQA International: Growth rates and Market shares in CEE
UNIQA International Growth rates and Market shares in CEE UNIQA GWP UNIQA GWP CAGR(d) UNIQA UNIQA Insurance penetration (FY2018, EURm) (2006–18) Market share Ranking 2018(b) Austria 3.734 21.5%(e) 2 Poland 3.0% 309 4.6% 2.1% 11 Czech Republic 274 6.9% 2.6% 5.1% 5 Hungary 213 2.0% 2.5% 6.6% 8(f) Slov
Slide 62: Shareholder structure
Shareholder structure Current shareholder structure Free float geographic distribution 0.7% 2.5% 1.0% 10.9% 15.1% 28.7% 49.0% 26.8% 36.9% 28.3% UNIQA Versicherungsverein Privatstiftung Free Float Continental Europe Raiffeisen Bank International Austria North America Collegialität Versicherungsverein
Slide 63: Shareholder information and contacts
Shareholder information and contacts Dividend per share / Pay out ratio General information UNIQA Insurance Group AG Listed on the Vienna Stock Exchange since 1999 309m common shares 41% 38% 45% 44% 102% 91% 67% ISIN: AT0000821103 ▪ Bloomberg: UQA AV 0.53 0.51 ▪ Reuters: UNIQ.VI 0.49 0.47 ▪ Vienna S
Slide 64: Disclaimer
Disclaimer ▪This presentation (the "Presentation"), and the information contained therein, is not directed to, or intended for viewing, release, distribution, publication or use by (directly or indirectly, in whole or in part), any person or entity that is a citizen of, or resident or located in, th
UNIQA Insurance Group — 9M 2019 Earnings Presentation on 6ix